(7) Income Taxes

Total income tax expense (benefit) for the years ended December 31 was comprised of the following:

	2012		2011			2010
Continuing operations	$	23.3	$	20.8		$	20.3
Discontinued operations				(0.6	)		(0.7	)
		23.3		20.2			19.6

Income from continuing operations before income taxes and income (loss) from affiliates and joint ventures was comprised of the following:

	2012		2011		2010

Income from continuing operations before income taxes and income (loss)from affiliates and joint ventures:
Domestic	$	56.4	$	53.8	$	43.6
Foreign		27.9		21.5		17.1
		84.3		75.3		60.7

The components of the provision for income taxes attributable to income from continuing operations before income taxes and income (loss) from affiliates and joint ventures for the years ended December 31 consisted of:

	2012			2011			2010
Provision (benefit) for income taxes:
Federal:
Current	$	14.0		$	5.2		$	7.4
Deferred		0.8			6.4			2.1
State:
Current		2.8			2.9			2.4
Deferred		(1.9	)		0.4			-
Foreign:
Current		8.4			8.0			7.4
Deferred		(0.8	)		(2.1	)		1.0
		23.3			20.8			20.3

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities as of December 31 were as follows:

	2012			2011
Deferred tax assets attributable to:
Accounts receivable	$	2.1		$	1.1
Inventories		2.7			1.7
Employee benefit plans		28.3			25.6
Accrued liabilities		0.6			0.5
Employee incentive plans		2.4			1.3
Tax credit carryforwards		6.9			7.2
Available-for-sale securities		-			2.8
Other		0.3			0.8
Total deferred tax assets		43.3			41.0
Deferred tax liabilities attributable to:
Plant and equipment		(17.7	)		(17.6	)
Land and mineral reserves		(12.7	)		(13.5	)
Joint ventures		(2.0	)		(1.8	)
Intangible assets		(2.7	)		(1.7	)
Available-for-sale securities		(1.2	)		-
Other		(0.8	)		(0.5	)
Total deferred tax liabilities		(37.1	)		(35.1	)

Valuation allowances		(5.1	)		(6.8	)

Net deferred tax asset (liability)		1.1			(0.9	)

We believe it is more likely than not that the deferred tax assets above will be realized in the normal course of business.

The following analysis reconciles the U.S. statutory federal income tax rate to the effective tax rates related to income from continuing operations before income taxes and equity income (loss) of affiliates and joint ventures:

	2012						2011						2010
	Amount			Percent of Pretax Income			Amount			Percent of Pretax Income			Amount			Percent of Pretax Income
Provision for income taxes at
U.S. statutory rates	$	29.5			35.0	%	$	26.3			35.0	%	$	21.2			35.0	%
Increase (decrease) in taxes resulting from:
Percentage depletion		(5.0	)		-6.0	%		(4.9	)		-6.5	%		(3.9	)		-6.4	%
State taxes, net of federal benefit		1.7			2.1	%		2.2			2.9	%		1.5			2.6	%
Foreign tax rates		(3.9	)		-4.6	%		(1.0	)		-1.4	%		(0.9	)		-1.5	%
Change in reserve for tax uncertainties		-			0.0	%		(0.7	)		-0.9	%		0.1			0.1	%
Domestic manufacturing deduction		(1.6	)		-1.9	%		(0.8	)		-1.1	%		(0.5	)		-0.8	%
Change in state tax rates		(1.9	)		-2.2	%		-			0.0	%		(0.1	)		-0.2	%
Foreign witholding tax		1.6			2.0	%		1.0			1.3	%		0.6			1.0	%
Foreign tax credits		(3.2	)		-3.8	%		(2.4	)		-3.1	%		(2.2	)		-3.6	%
Changes to valuation allowance		1.9			2.2	%		(0.2	)		-0.3	%		3.4			5.6	%
Tax from foreign disregarded entities		0.4			0.5	%		0.3			0.3	%		1.4			2.2	%
Other		3.8			4.3	%		1.0			1.4	%		(0.3	)		-0.6	%
		23.3			27.6	%		20.8			27.6	%		20.3			33.4	%

Percentage Depletion

Depletion deductions are federal income tax deductions that arise from extracting minerals from the ground. There are two methods of calculating depletion: cost depletion and percentage depletion. Cost depletion deduction is similar to depreciation in that it allows us to recover the cost of an asset over the resources' productive life. Percentage depletion deduction is computed on the basis of the income from the property rather than capitalization costs. It is different from depreciation and cost depletion deductions, however, in that percentage depletion deduction in excess of cost is a permanent book to tax difference, whereas depreciation and cost depletion deductions are temporary in nature. Hence, percentage depletion deduction affects the effective tax rate whereas depreciation and cost depletion deductions do not. We calculate depletion under the percentage depletion method based upon revenues and costs from our mining activities in the U.S.

Tax on Reinvested Earnings

We have not provided for United States federal income tax and foreign income withholding taxes on approximately $138.9 and $113.6 of undistributed earnings from international subsidiaries as of December 31, 2012 and 2011, respectively, because such earnings are intended to be reinvested indefinitely outside of the U.S. If these earnings were distributed, foreign tax credits may become available under current law to reduce or eliminate the resulting income tax liability in the United States.

Tax Holidays

We have benefitted from tax holidays in both Poland and Thailand as a result of our locating and investing in special economic zones in each country. These tax holidays resulted in reductions to our income tax expense of $0.2, $0.1, and $0.5 in 2012, 2011 and 2010, respectively, representing benefits of $0.01, $0.00 and $0.01 to diluted earnings per share in 2012, 2011 and 2010, respectively.

Our agreement with the Polish tax authorities expired in 2010. We continue to pursue other opportunities in an effort to minimize income tax within the country.

Our agreement with the Thai tax authorities provides for tax holidays on several investments. The most significant tax exemption is on all income from manufacturing operations (distributed goods are still subject to taxation) related to our initial investment. These initial manufacturing activities were taxable at 50% in years 2006 through 2010. An additional tax holiday was granted in 2007 for the expansion of our Thai facility. Income generated from this expansion is granted a 100% tax holiday from corporate income tax for eight (8) years beginning in 2007 and then taxable at 50% for five (5) years starting in 2015. We attempt to modify and obtain tax concessions when possible.

Exams

In the normal course of business, we are subject to examination by tax authorities throughout the world. With few exceptions, we are no longer subject to income tax examinations by tax authorities for years prior to 2010. The United States Internal Revenue Service ("IRS") has examined our federal income tax returns for all open years through 2009.

NOLs and Credit Carryforwards

At December 31, 2012, we have $0.9 of various income tax credits, which we expect to utilize within the ten year carryforward period. Due to the expiration of state operating loss carryovers, we have written off the related deferred tax asset of $0.6 and the corresponding full valuation allowance at December 31, 2012.

Unrecognized Tax Benefits

The following table summarizes the activity related to our unrecognized tax benefits:

	2012		2011			2010

Balance at beginning of the year	$	-	$	0.8		$	0.7
Increases related to prior year tax positions							0.1
Increases related to current year tax positions
Decreases related to the expiration of statue of limitation / settlement of audits				(0.8	)

Balance at the end of the year		-		-			0.8